VINACHEM

HOUSTON (ICIS)--Rising ethylene spot prices and feedstock costs drove US February ethylene contracts up 3.75 cents/lb to 49.00 cents/lb ($1,080/tonne, €778/tonne), market sources said on Friday.

The 8.3% increase for the February contract was largely in line with market expectations and erased a 3.25 cent/lb drop in January.

Spot ethylene was heard traded at 53.00-53.25 cents/lb on the Williams system and at 53.50-53.75 cents/lb on the Equistar system this week.

For the month of February, the average of the weekly spot ranges as assessed by ICIS was 48.9 cents/lb, compared with 42.8 cents/lb in January.

The continued increase in ethylene spot prices is likely to provide support for another contract hike in March, sources said.

Higher ethane prices could also support a contract increase in March, sources said, although ethane prices have defied the trend of higher energy prices over the past week.

Mont Belvieu ethane prices were heard at 66.00-67.50 cents/gal around midday on 4 March, down from 71.0-72.5 cents/gal a week earlier.

Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.

Buyers include Dow Chemical, GeorgiaGulf, Occidental Chemical (OxyChem) and Total.